Sell for More Trivia is a weekly blog series that playfully presents a trivia question about commercial real estate.
Sellers want to dispose of their property for the highest price, in the shortest period of time, with the fewest contingencies to the deal. So when does offering the property to the market without an asking price achieve these goals?
First, the property should be in high demand. You expect buyers to line up for their shot at purchasing the property. In today’s marketplace, large apartment buildings are a good example.
Second, you’ll most likely be targeting big, institutional investors.
The key here is to provide all the information the buyer needs to establish an offer price on their own. That means you must present easy to understand historical income and expenses. Also, prospects should be able to review the lease documents. If you’ve got a strong appraisal on file…provide it. Give buyers everything they need to fully understand the offering and feel comfortable making a strong offer.
The idea is to generate multiple offers. Typically, a “best and final” follows the initial offering round and a buyer is chosen. Institutional investors are used to un-priced opportunities and therefore will react positively.
That said, the smaller, more traditional buyer may not react well. This group is accustomed to a traditional “ask – offer – response” scenario.
In conclusion, unless you’re selling a trophy property and targeting institutional investors…it’s probably in your best interest to establish an asking price.
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About Beau Beach, CCIM
Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee, South Florida and Chicago markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached at 800-721-3287, click to schedule a call or Beau@ProwessIRES.com